How many foreign brands are still operating in Russia: spoiler: more than you thought

The consulting company NF Group (ex-Knight Frank Russia) has calculated the number of international brands operating in Russia. The study included 152 foreign retailers who continued to operate as part of shopping centers in 2022, reports CRE.

Photo: IStock

The leaders in terms of the number of brands represented in Russia are such countries as the USA - 22,4%, Italy - 15,1%, France - 10,5%, Turkey - 9,9% and Germany - 9,9%. The smallest share falls on Kazakhstan, Finland, South Korea and others. The largest number of companies is concentrated in the fashion segment (59,9%), catering accounts for 9,9%, household appliances and electronics - 5,3%.

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Brands specializing in the sale of perfumes and cosmetics, accessories and souvenirs account for only about 6% of retailers in total.

The fashion category is also leading in terms of the area occupied by stores (31,4%). It is followed by food (20,6%), DYI (18,7%) and department stores (12,5%). The smallest shares in terms of area are occupied by the categories “Gifts and souvenirs” (0,04%), “Jewelry” (0,2%), and “Services” (0,2%).

Foreign brands in classic shopping centers are mainly represented in the price segment "medium" (46,7%) and "average plus" (22,4%), while "premium" accounts for only 1,3%. This is due to access to quality materials, as well as the desire to implement a strategy of mass lean production.

Samsung decided to stop deliveries of its equipment to Russia in the spring, but so far it has not taken any steps to exit the market. Moreover, sometimes there are reports in the media about the intentions of the Koreans to resume deliveries to Russia by the end of the year. In such indecision, there are still a lot of those who are afraid of losing part of the dividends, even if they are earned on blood.

Despite the current situation, some international retailers continue to enter the Russian market and increase their presence here: the Turkish fashion brand Perspective has opened in Yekaterinburg, which already has five stores in Russian shopping centers. The retailer entered the market in the spring of 2022. A sports store of the Chinese brand ANTA Sports, which also debuted in Russia in 2022, has opened in Chita. The ANTA Sports brand was the official equipment partner of the 2022 Winter Olympics. Points of various foreign brands are also opening in Moscow. For example, Tezenis lingerie store (Italy), it is planned to open Alex YVN brand (Armenia). The Abricot store was also opened, created by an international team from Russia, France and Italy. The corners of the Japanese brand of innovative devices for the skin L&L Skin appeared. The first coffee shop of the Coffee Boom chain from Kazakhstan and Uzbekistan also opened. Many other brands have announced further plans for their development.

Since February 2022, more than 180 foreign companies have restricted their activities in Russia, and more than 15 of them have announced plans to leave the market. However, at the moment, more and more foreign companies wish to maintain their presence in Russia, and some of them continue to expand and diversify their business in the Russian Federation. So far, the flow of high-profile exits of retailers from the market is slowing down. And 17 operators returned to Russia after rebranding. By the end of the year, Turkish catering chains are planning to enter the Russian market - fast food brands Chitir Chicken and Yesen Burger, Little Kitchen restaurant, which plans to open three outlets, and Arabica coffee chain. Many other brands from Turkey are currently negotiating to expand their presence in the country and increase sales, including major clothing manufacturers adL, Mudo, LTB, Twist and Ipekyol. In addition, retailers from Kazakhstan, Belarus and Italy are now discussing entering the Russian market. Also, the release of the Armenian brand Alex YVN is planned in the near future.

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Evgenia Khakberdiyeva, regional director of retail real estate at NF Group, says that with the departure of a number of international brands, Russian retailers and players from Kazakhstan, Belarus, Turkey and Italy will be able to occupy most of the vacant space.

This will be ensured by splitting large premises into smaller ones for mono-boutiques, for which there is already significant demand, as she says.

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